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Ethanol Subsidies Survive

Sen. Tom Coburn (R-OK) forced a vote on eliminating an excise tax credit for ethanol. Something like this should be a no-brainer. Tax subsidies for ethanol are economically wasteful and environmentally destructive. Yet the vote failed, 59-40. This could have been a tough vote for Republicans, as some conservatives consider the repeal of tax credits tantamount to tax increases, but most Republicans did the right thing. Only a handful of farm state GOP Senators (and, inexplicably, Ohio’s Rob Portman) voted to preserve this pork. Senate Democrats, on the other hand, largely lined up with the corn lobby, against American consumers, taxpayers and environmental concerns. Senate majority leader Harry Reid actively whipped against the measure because of alleged procedural problems. For those interested, the full vote tally is here.

How is it that the party loudly proclaiming how the government shouldn’t “pick winners and losers” could only manage to get 34 senators to oppose one of the most egregious examples of federal industrial policy?

On Tuesday, the Senate rejected an amendment sponsored by Tom Coburn, R-Okla., to end the $6 billion in tax subsidies plus the import tariffs that have given rise to Big Ethanol. The measure got just 40 votes, six of them from Democrats.

The picture doesn’t get much better at the GOP presidential candidate level, where for every critic of the subsidy there’s a Newt Gingrich and Mitt Romney extolling its virtues.

As for the opposition to repealing the ethanol tax subsidy from some conservative activists, such as Americans for Tax Reform’s Grover Norquist, NRO reports that GOP Senators were given a pass on supporting Coburn’s amendment if they also pledged to vote for a proposal by Senator Jim DeMint (R-SC) to offset the tax “increase” with a permanent estate tax repeal.